Realitista

Activist Post: Hundreds of Economists: Marijuana Prohibition Costs Billions, Legalization Would Earn Billions

Why is this never in the discussion for helping to balance the budget? Sometimes the discussion always revolves around saving a few million from NPR or NASA, never the billions from the failed drug war.

Over 300 economists, including three Nobel Laureates, recently signed a petition that encourages the president, Congress, governors and state legislatures to carefully consider marijuana legalization in America. The petition draws attention to an article by Harvard economist Jeffrey Miron, whose findings highlight the substantial cost-savings our government could incur if it were to tax and regulate marijuana, rather than needlessly spending billions of dollars enforcing its prohibition.

Miron predicts that legalizing marijuana would save $7.7 billion per year in government expenditure on enforcement, in addition to generating $2.4 billion annually if taxed like most consumer goods, or $6 billion per year if taxed similarly to alcohol and tobacco. The economists signing the petition note that the budgetary implications of marijuana prohibition are just one of many factors to be considered, but declare it essential that these findings become a serious part of the national decriminalization discussion.

Mitt Romney: American Parasite

It was the early 1990s, and the 750 men and women at Georgetown Steel were pumping out wire rods at peak performance. They had an abiding trust in management’s ability to run a smart company. That allegiance was rewarded with fat profit-sharing checks. In the basement-wage economy of Georgetown, South Carolina, Sanderson and his co-workers were blue-collar aristocracy. “We were doing very good,” says Sanderson, president of Steelworkers Local 7898. “The plant was making money, and we had good profit-sharing checks, and everything was going well.” What he didn’t know was that it was about to end.

[Mitt’s] formula was simple: Bain would purchase a firm with little money down, then begin extracting huge management fees and paying Romney and his investors enormous dividends. The result was that previously profitable companies were now burdened with debt.

But much like the Enron boys, Romney’s battery of MBAs fancied themselves the smartest guys in the room. It didn’t matter if a company manufactured bicycles or contact lenses; they were certain they could run it better than anyone else. Bain would slash costs, jettison workers, reposition product lines and merge its new companies with other firms. With luck, they’d be able to dump the firm in a few years for millions more than they’d paid for it.

But the beauty of Romney’s thesis was that it really didn’t matter if the company succeeded. Since he was yanking out cash early and often, he would profit even if his targets collapsed.

Which was precisely the fate awaiting Georgetown Steel.

The Domino's iPad Game Could Transform The Way We Order Pizza and Our Lives

People who lack vision might call Pizza Hero a mere video game. If they do, they’re seeing only a slice of—no joke—what could be an extraordinary development in our society. We are talking about Pizza Hero, a pizza-making video game from Domino’s that can be downloaded for free on the iPad. But we are also talking about so much more. We are talking about a piece of software that could change how the American labor force finds work.

In an idea they may have borrowed from the 1984 nerd-classic movie The Last Starfighter, Pizza Hero doubles as video game and job-training tool. If you pass its introductory challenges and its “Two Pizza Throwdown” mission (your task: make a couple of pizzas), you’ll be prompted to apply for a job at Domino’s. The app loads the real Domino’s career page, with links to a job application.

The Domino’s iPad Game Could Transform The Way We Order Pizza (And Get Jobs). In The Last Starfighter, the teenage hero discovered that the spaceship-shooting arcade game he played in his trailer park was actually a recruitment tool for fighting in an intergalactic war. That was fake. Pizza Hero is real and could winnow the field of potential Domino’s pizza chefs to only those who have excelled using pizza-making simulations. It doesn’t technically do that, but it could.

Why You Can’t Get a Taxi - Magazine - The Atlantic

Another good example of how industry uses government to create closed monopolies and destroy free market effects to the consumer’s detriment.

Like most urbanites, I’ve spent a lot of time voicing the standard complaints: Why are taxis dirty and uncomfortable and never there when you need them? Why is it that half the time, they don’t show up for those 6 a.m. airport runs? How come they all seem to disappear when you most need them—on New Year’s Eve, or during a rainy rush hour? Why must cabbies drive like PCP addicts? Women complain about scary drivers. Black men complain about drivers who won’t stop to pick them up.

The cabdrivers have their own litany. They drive long hours for little money: the average cabdriver earns $27,060 a year, before expenses. They are at high risk for traffic accidents and, because they carry a lot of cash, for robbery. When drivers turn down fares to neighborhoods like mine, it’s not because they don’t want to miss a second of The Diane Rehm Show while they take my cash and make change. Those trips, where they probably won’t get a return fare, and must instead burn time and gas while the meter’s off, can mean the difference between profit and loss for the day; cabbies can’t afford too many of them. What I’m describing is a classic market failure: people who are willing to do business together can’t make it happen. If taxis and passengers only knew how to find each other, and could strike deals that would appeal to both, everyone would be better off. Why can’t we fix this?

Then came the Great Depression. Desperate new drivers flooded the market, escalating the fare wars that had begun in the ’20s. Meanwhile, the nation’s governing ideology was shifting radically. Parts of the New Deal were explicitly anticompetitive—merchants and manufacturers who wanted to display the blue eagle of the National Recovery Administration, for instance, were expected to sign on to an industry “Code of Fair Competition,” which typically contained a price-fixing agreement. In the taxi industry, local governments began setting minimum as well as maximum fares, and controlling the number of cabs that could enter the market. In 1937, New York City’s Haas Act introduced its famous medallion system, limiting the number of taxis to 13,566—about where it remains today.

Many defenders of regulation argue that restrictions are necessary because cabdrivers make so little money as it is. But there’s very little evidence that restricting the number of cabs improves the lot of the people who drive them, rather than the lot of the companies that, by and large, own the licenses. It’s simply too easy for new would-be drivers to show up at a taxi service and compete cabbies’ earnings down—in these days of GPS, you don’t even need to be familiar with the area. So any excess profits from restricting entry tend to accrue not to the drivers, but to the people who own the right to drive. Last October, two New York City taxi medallions sold for $1 million apiece.

“In New Haven, nearly every taxi is owned or controlled by [the same] person,” Robert McNamara, an attorney at the Institute for Justice, which litigates against these sorts of rules, told me. Restricting entry “hasn’t made the drivers better off.”

Nonetheless, the public fights usually get framed as consumers-against-drivers. And regulators respond with a patchwork of policies to pay off various constituencies—entry restrictions in exchange for lower fares, “fuel surcharges” in exchange for laws requiring drivers to take you anywhere in the city.

Almost all the everyday complaints about cabs trace back to this regulatory cocktail. Drivers won’t take you to the outer reaches of your metropolitan area? The regulated fares won’t let them charge you more to recover the cost of dead-heading back without a return customer. Cabs are poorly maintained? Blame restricted competition, and the inability to charge for better quality. Cabbies drive like maniacs? With high fixed costs for cars and gas, and no way to increase their earnings except by finding another fare, is it any wonder that they try to get from place to place as fast as possible?

Kobe Beef Scam, Part 3: Why the U.S. Government Wants You To Buy Fake Foods - Forbes

How American’s love for intellectual property protection strangely only applies to their own products.

For the past two days I have examined in (sometimes excruciating) detail the facts behind the various products sold in this country as Kobe beef and Japanese Kobe beef (Part 1), and domestic or American-style Kobe, Wagyu, and domestic, American-style, or Australian Wagyu (Part 2).

After this examination, my conclusion is that these products are collectively an attempt to fool the American consumer into thinking they are buying something they are not, at very high prices, by trading on the longstanding reputation of excellence belonging to the cattle producers around Kobe, Japan, whose meat is never, ever sold on our shores.

But Kobe is just the tip of the labeling iceberg – there are literally hundreds of other food items, from the extravagant, such as Champagne and Cognac, to the more common, like Parmigiano-Reggiano cheese, whose production and sale in this country would violate many very old and well-known foreign trademarks – except that these trademarks are not recognized by U.S. law. Like Faux-be beef, this domestic production is undertaken mainly for one reason – to reap the benefit of good will and quality brand reputation created by someone else, namely foreigners who have no recourse in U.S. courts.

"One of the best-kept secrets in economics is that there is no case for the invisible hand"

One of the best-kept secrets in economics is that there is no case for the invisible hand. After more than a century trying to prove the opposite, economic theorists investigating the matter finally concluded in the 1970s that there is no reason to believe markets are led, as if by an invisible hand, to an optimal equilibrium — or any equilibrium at all. But the message never got through to their supposedly practical colleagues who so eagerly push advice about almost anything. Most never even heard what the theorists said, or else resolutely ignored it.

Of course, the dynamic but turbulent history of capitalism belies any invisible hand. The financial crisis that erupted in 2008 and the debt crises threatening Europe are just the latest evidence. Having lived in Mexico in the wake of its 1994 crisis and studied its politics, I just saw the absence of any invisible hand as a practical fact. What shocked me, when I later delved into economic theory, was to discover that, at least on this matter, theory supports practical evidence.

1970's Study Predictions Are Still on Target for 2030's Decline of Humanity

In 1972, The Limits to Growth modeled the effects of unlimited human expansion on the planet’s finite resources. Now, 40 years later, the predicted models are still a near match with reality.

The Limits to Growth was written by MIT researchers Donella H. Meadows, Dennis L. Meadows, Jørgen Randers, and William W. Behrens III on commission by global think tank, The Club of Rome. It examined five variables of interaction between people and the planet—world population, levels of relative industrialization, amount of pollution, worldwide food production and the rate of resource depletion. It posited that, with unchecked expansion, the world’s supply of resources would falter and begin to fail by 2030. And, as you can see from the graph, humanity is apparently well on its way towards meeting that goal.

This would result in a massive worldwide economic catastrophe and result in an sharp and ongoing reduction in the human population for generations. However, the alternative to this model—austerity measures as we’ve seen in Greece but on a global scale—could potentially spell financial ruin for billions. So do you want to be poor and hungry or poor and hungry during an economic apocalypse?

Take Care of Unemployment and the Budget Will Look After Itself

Fiscal stimulus, on the other hand, works. The US has had 23 consecutive months of private-sector job growth, with 3.7m new jobs created over the past two years thanks to Barack Obama’s American Recovery and Reinvestment Act. US unemployment benefit claims are now at a four-year low. But Europe’s political and financial elites – led by austerity junkies such as “Merkozy”, the European Central Bank’s Mario Draghi and, of course, our very own David Cameron – pretend not to notice. Here on the jobless side of the Atlantic, the only solution to austerity-induced unemployment, it seems, is more austerity. In Brussels, eurozone finance ministers threatened to impose swingeing fines on those member states, such as Spain and the Netherlands, that may miss their budget deficit targets. If insanity, as Albert Einstein is said to have once remarked, is doing the same thing over and over again and expecting different results, then our leaders have gone mad. The irony is that mass unemployment itself is the biggest barrier to deficit reduction. Basic economics teaches us that the best way to cut borrowing levels is to get people back to work and paying taxes. Or as John Maynard Keynes put it: “Look after unemployment and the budget will look after itself.”